The Bank of Korea concluded that it is still far way to apply blockchain technology to financial field.
The Bank of Korea carried out a mock test for fund transfer between financial institutions and fund transfer between individuals last year. At the end, it concluded that blockchain’s processing speed and restoration of transactions need to be improved.
According to industries, The Bank of Korea concluded that the result from ‘blockchain-based small settlement (fund transfer between individuals) mock test was not much different from that of ‘large settlement (fund transfer between financial institutions) mock test’.
The Bank of Korea carried out mock tests for 3 months since September of 2018. It applied blockchain technology to settlements and wire transfer process between individuals and evaluated security, restoration, expandability, and efficiency of blockchain technology.
BLOCKO, which was selected as the service company, created detailed design such as transaction process procedure, participant certification method, wallet management method, mobile application (customer) implementation method, and transaction monitoring method.
BLOCKO had also carried out pilot settlements on employees of The Bank of Korea’s Korea Development Institute through a testbed that was established within The Bank of Korea’s inner network.
Every mock test was completed when BLOCKO submitted its final reports to The Bank of Korea at the end of December. It was heard that efficiency (transaction processing speed) and restoration were still insufficient just like ‘blockchain-based large settlement mock test’.
“We had approached these mock tests academically.” said a representative for The Bank of Korea. “After receiving final reports, the result from ‘blockchain-based small settlement mock test’ was not much different from that of ‘large settlement mock test’.”
The Bank of Korea announced results from tests from February of last year when it tested R3CEV’s financial platform called ‘Corda’ on financial network. It announced that although Corda is excellent in system expandability, it lacks efficiency and restoration.
Results from small settlement mock test will not be announced through a separate report as The Bank of Korea does not want to give mix signals to markets.
Blockchain industry has high expectations that blockchain technology will be used by financial industry in the near future as Korean Federation of Banks and Korea Financial Investment Association commercialized blockchain certification. On top of this, there are rumors that representatives from banks are meeting with cryptocurrency-based simple payment providers.
“It will be difficult to apply blockchain technology within the next two years.” said a representative for the financial industry. “We have to be conservative in applying new technology since financial industry can collapse once trust is broken.”
Staff Reporter Ham, Jihyun | goham@etnews.com